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History of Economic Analysis part 66

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History of Economic Analysis part 66. At the time of his death in 1950, Joseph Schumpeter-one of the major figures in economics during the first half of the 20th century-was working on his monumental History of Economic Analysis. A complete history of humankind's theoretical efforts to understand economic phenomena from ancient Greece to the present, this book is an important contribution to the history of ideas as well as to economics. | History of economic analysis 612 by Marx as a special case that belonged in a separate compartment and was never organically assimilated by the body of theory. And then and only then that is by virtue of a hypothesis forced upon the classics by the primitivity of their technique it does become true that demand for labor meaning demand for productive labor as distinguished from labor paid out of revenue or the means destined for the maintenance of such labor given a certain level of social productivity can increase and decrease only through saving and dissaving 45 which in fact become synonymous with destining more or less means for this purpose. Or to put it differently the wage fund is a fund or aggregate sui generis because its size and variations are determined by a proximate cause sui generis namely past and present savings everything else acts upon it only through the rate of saving. Of course the classics would not have denied that the rate of savings itself and therefore total wage payments are determined by many factors some of which are in turn reacted upon by the rate of savings. In addition they would not have denied that the kinds and quantities of wage goods the workmen actually get depend upon many other circumstances that are not uniquely determined by the rate of savings. But they would have replied that those factors such as the rate of profit act upon the wage fund only at one remove so that their doctrine was formally still valid and that the circumstances that do directly affect what goods the workmen get such as the level of social productivity were simply taken as given. The reader will observe however that this means little more than teasing the opponent. It is of course always possible to say givenA B C. then Y depends upon X the practice revived by Keynesian economics and dubbed implicit reasoning by Professor Leontief. Simplification may amount to caricature. Caricature may be ideologically biased though there is no reason to suspect this